Shaquille O’Neal is set to pay $1.8 million to resolve a class-action lawsuit linked to his promotion of FTX, the cryptocurrency exchange that collapsed in late 2022. This settlement is significant not only for O’Neal, but also for the broader implications it has on how celebrity endorsements in the cryptocurrency industry are treated by the courts.
O’Neal becomes one of the first high-profile figures to settle in the ongoing litigation surrounding FTX, which has also involved celebrities like Tom Brady, Gisele Bündchen, Steph Curry, Naomi Osaka, and Larry David. Many claims against these personalities are being dismissed; however, O’Neal’s case stands out due to his active promotional role for FTX, including social media campaigns that presented the exchange as a reliable option for his followers.
The lawsuit alleges that O’Neal earned approximately $750,000 for his promotional efforts, leveraging his fame and influence to endorse FTX while the company was reportedly misusing customer assets. The legal documents indicate that O’Neal’s promotion contributed to the perception that FTX was a safe investment, a relationship that was beneficial for his own events, such as Shaq’s Fun House music festival.
The settlement, announced by attorney Adam Moskowitz and filed in the U.S. District Court for the Southern District of Florida, indicates a shift in corporate accountability among high-profile endorsements, particularly in the unstable cryptocurrency space. With the recent crash of FTX, which filed for bankruptcy in November 2022 due to financial mismanagement, regulators like the SEC and FTC are intensifying their scrutiny of undisclosed endorsements, signaling that celebrities are accountable for the claims they support.
Interestingly, O’Neal previously expressed skepticism about cryptocurrencies, stating he didn’t fully understand them, which raises questions about why he chose to affiliate with FTX without a comprehensive understanding. He emphasized the need for “financial literacy”, highlighting the risks associated with the fast-paced crypto market.
O’Neal isn’t alone in facing legal challenges; he was also recently ordered to pay $11 million for another venture related to a failed NFT project, emphasizing the significant financial impact of his foray into the cryptocurrency realm. With total settlements amounting to $12.8 million, it’s likely that O’Neal will reconsider future endorsements in the crypto space.
This case serves as an important reminder that celebrity endorsements carry weight and responsibility, especially in rapidly changing industries like cryptocurrency. As more stars may reconsider their roles in such ventures, this could lead to greater awareness and precaution among both influencers and investors alike.